I could run the Fed better than the Fed, claims Trump
Donald Trump has made a surprise attack on the independence of the US Federal Reserve, saying that the president should have a say over the central bank's decisions.
Speaking at his Mar-a-Lago residence in Florida, the Republican presidential candidate said: “I feel the president should have at least [a] say in there.
“I think that in my case, I made a lot of money, I was very successful and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.”
After a turbulent week in global stocks markets, partly caused by disappointing US jobs data that led to calls for an immediate cut in interest rates, there was better news on the economy later in the week. Weekly claims for unemployment benefits in the US have eased by the most encouraging margin in almost a year, calming fears about the health of the world's largest economy.
The number of Americans filing new applications for unemployment benefits fell by 17,000 to 233,000 for the week to August 3, the Labor Department said. Economists had expected 240,000 claims for the latest week. Weekly unemployment claims are widely considered to represent job losses.
The figures were watched closely by investors after disappointing jobs data for July, published last Friday, fuelled a stock market sell-off on Monday amid fears that the US economy might be edging towards a recession.
Stocks on Wall Street closed higher. The technology-heavy Nasdaq Composite was 2.9% higher at 16,660.02, while the more broadly based S&P 500 was up 2.3% at 5,319.31. Benchmark treasury yields rose back above 4% and the dollar strengthened against a basket of currencies.
Jamie Dimon, the chief executive of JP Morgan, the Wall Street bank, suggested that the stock market sell-off had been an overreaction. In an interview with CNBC on Wednesday, he said: “Markets fluctuate. I think people overreact a little bit to the daily fluctuation of the market. And sometimes it's for good reasons. Sometimes it's virtually [for] no reason.
“I was with Warren Buffett [the renowned investor] yesterday and we always talk about the resiliency of America. It is extraordinary.”
Investors in interest rate futures contracts lowered their bets that the Fed would start to cut borrowing costs next month with a 50-basis-point reduction to about a 58% probability, from 70% before the release.
“The talk of an imminent recession seems wide of the mark,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said.
“Investors have to be careful not to read too much into one report, like they did recently with the last payroll report,” Jeffrey Roach, chief economist at LPL Financial, said. “If the data deteriorates quickly from here, the Fed could take more decisive action in September and cut by a half of a per cent.”
Last week the Fed kept its benchmark overnight interest rate in the 5.25% to 5.50% range, where it has been since last July. Jerome Powell, its chairman, said that a reduction in borrowing costs would be on the table in September.
Commenting on the latest jobs market data, Nick Bunker, from the Indeed Hiring Lab, said: “It's not in freefall. It's just continuing the moderation that we've been seeing.”